European session:

The euro rose against the dollar, approaching its strongest in 18 months, on speculation that European Central Bank President Jean-Claude Trichet will signal further rate increases after policy makers meet tomorrow.
The 17-member common currency strengthened against all but one of its most actively traded peers as a report showed European services and manufacturing growth accelerated in April.
New Zealand’s dollar dropped to a two-week low after a government report showed the nation had the biggest net outflow of residents in more than 10 years. The pound slumped to the weakest in more than a year against the euro.
“The ECB has nailed its anti-inflation colors firmly to the mast and the Fed hasn’t even got around to starting yet,” said Steven Barrow, a currency strategist at Standard Bank Plc in London. “This euro rally won’t extend too far if the ECB isn’t as hawkish as the market expects.”
The yield on 10-year German bunds climbed above the U.S. equivalent yesterday for the first time since June 2009 as data showed producer-price inflation in the euro region unexpectedly accelerated to the fastest pace in 2 1/2 years in March, boosting the case for tighter monetary policy.
A composite index of European services and manufacturing rose to 57.8, from 57.6 in March, led by factory output, indicating the economy is weathering higher oil prices. A separate report showed Spain’s registered unemployment declined for the first time this year.
French Finance Minister Christine Lagarde said a strong euro benefits the region’s companies and signaled that inflation is a greater concern than growth in the region, saying there’s no need for further stimulus, and warning that consumer-price increases are accelerating “a little bit.”
The pound slid to the lowest in more than a year against the euro after reports showed U.K. house prices fell and construction growth slowed, limiting the case for interest-rate increases from the Bank of England ahead of tomorrow’s decision.